Get an AI-backed Boost for Global Investing 🤖

Artificial Intelligence (AI) could be the secret ingredient in successfully investing in global equities. This is because of the ability of AI algorithms to mine millions of data points and analyse them with greater speed and efficiency than humans ever could. The M&G Investments team is successfully combining their own global expertise with the power of AI to drive the investment engine that sits behind Global Property Funds.  

It’s important to look globally

Gaining exposure to companies beyond the local landscape of the JSE (which only represents about 1% of the global equities universe) is important for achieving an optimal risk/return balance in a portfolio. By holding offshore investments, you gain access to diverse companies, geographies and sectors – those that aren’t represented locally, like alternative energy or biotechnology. This diversification both reduces portfolio risk and enhances return potential at the same time. A financial adviser can assist you in deciding an appropriate weighting of global assets in your portfolio depending on your investment goals. They can also help avoid any duplication within your JSE-listed and offshore investments and guide you in choosing the most suitable unit trust funds, which are an easy way to get offshore exposure.    

How AI brings the global equity universe within range

AI vastly broadens the scope of investment opportunities, helping to solve the biggest problem for asset managers: identifying companies that are most likely to significantly outperform the market.

Consider that a traditional global active manager with a research team and dedicated analysts might have a ‘watchlist’ of around 300 companies, ranking them on various criteria and analysing their “investability” according to the manger’s specified characteristics. There are, however, over 8,500 listed companies around the globe, so it’s very difficult to consider them all in depth. Equally, excluding any could mean missed opportunities.

Using AI provides a global view as it enables a fund manager to scan for those companies that have the most potential. The use of AI in our Property Funds sets M&G Investments apart and helps us to make sense of the patterns associated with global financial data and share price movements, which of course are changing continually. Every week the fund managers re-balance the funds to account for these movements, making for very actively managed portfolios.

There are many steps within the (human) team to get to the final stock selection once the AI results are in. Importantly, the fund managers ultimately make the final decisions, ensuring they keep a close eye on any changes that might be needed in the holdings. This combination of machine-learning and human expertise has delivered superior returns over time, including when there was extreme market stress such as the impact of the Covid-19 pandemic in early 2020.

Enhance your equity investment exposure

Managed by M&G Investments from London, Property Funds are ideal for investors seeking long-term capital growth. These funds require a longer-term investment horizon of seven years or longer in order to weather the higher market volatility associated with these asset classes, while also offering patient investors potentially higher returns than other asset classes.

For more information on investing Unit Trusts, know more through our EasyWealth portal.

New to investing and want to know more about the latest research?

Is NVIDIA a ‘Picks and Shovels’ Company for AI Technology?

Stocks Battle: Unilever vs. Reckitt Benckiser ⚔️

Should You Be All-in In Stocks All The Time? 🤔

Sources – M&G

Any opinions, news, research, reports, analyses, prices, or other information contained within this research is provided by an external contributor as general market commentary and does not constitute investment advice for the purposes of the Financial Advisory and Intermediary Services Act, 2002. First World Trader (Pty) Ltd t/a EasyEquities (“EasyEquities”) does not warrant the correctness, accuracy, timeliness, reliability or completeness of any information (i) contained within this research and (ii) received from third party data providers. You must rely solely upon your own judgment in all aspects of your investment and/or trading decisions and all investments and/or trades are made at your own risk. EasyEquities (including any of their employees) will not accept any liability for any direct or indirect loss or damage, including without limitation, any loss of profit, which may arise directly or indirectly from use of or reliance on the market commentary. The content contained within is subject to change at any time without notice.